A daily surge of $33! Gold prices approach historic highs. Why did precious metals suddenly accelerate at the end of the year?

Gold Price Surges to Record Highs, Silver Price Hits New Records

The Asian trading session on Monday started off unsettled. Spot gold surged unexpectedly, rising by $33 within just a few hours, currently hovering around $4,372 per ounce. Even more remarkable was silver’s simultaneous rally, which gained 1.3% to $68.05 per ounce, both hitting new highs for the year.

Traders are asking the same question: the October high of $4,381 per ounce, once a distant target, now seems within reach. Will this ceiling be broken by the end of the year?

Safe-Haven Sentiment Intensifies, Rate Hike Expectations Reverse

This round of precious metals rally is not without clues. A series of economic data released last week indicated a shift in central bank policy paths. The market now widely expects the Federal Reserve to cut rates twice by 2026, a notably dovish shift from earlier forecasts. An accommodative monetary environment naturally benefits non-yielding assets like gold and silver—when interest rates decline, the opportunity cost of holding these non-producing metals decreases.

Geopolitical tensions have further fueled safe-haven buying. Stricter U.S. sanctions on Venezuela’s oil exports, and Ukraine attacking Russian “shadow fleet” tankers—these events serve as reminders that global uncertainties persist, and the value of safe-haven instruments is being re-evaluated.

Physical Demand Boosts Prices, Supply Tightens

It’s worth noting that this rally in precious metals is driven not just by sentiment but also by real capital flows. According to Bloomberg data, gold ETFs have seen five consecutive weeks of net inflows, and the World Gold Council’s statistics show that, apart from May, fund holdings have increased every month this year—indicating that large institutions and retail investors are actively purchasing gold through physically-backed trading instruments.

Silver’s rally logic is even more intriguing. After the “short squeeze” in October, speculative capital continued to pour in, while physical supply remains tight. The trading volume of Shanghai silver futures has approached levels seen during the most supply-constrained periods two months ago, suggesting a renewed market demand for silver.

Bullish Outlook from Institutions, Targeting $4,900

Goldman Sachs analysts recently expressed a clear optimistic outlook—there is room for further gains in gold next year. Their baseline target is $4,900 per ounce, with a particular emphasis on the higher upside risks.

An interesting observation from Goldman Sachs is that ETF investors are competing with central banks worldwide for limited physical gold supplies. This indicates that demand for gold has surpassed traditional central bank purchases, with retail and institutional participation reaching new heights.

Technical Analysis: $4,381 is a Must-Overcome Barrier

From a technical perspective, FXStreet analyst Valencia remains bullish. For gold prices to continue their upward trend, they must break through October’s high of $4,381 per ounce. Once this level is surpassed, higher targets at $4,400, $4,450, and even $4,500 become possible.

Conversely, if gold falls below $4,300 per ounce, traders will attempt to challenge the December 11 high of $4,285, along with key support levels at $4,250 and $4,200.

Precious Metals Performance in 2024 Sets Record

Looking at the entire 2024, gold and silver have achieved their strongest annual gains since 1979. Gold has risen by about two-thirds, while silver has more than doubled since the start of the year. This is the result of persistent central bank accumulation, continuous net inflows into physical ETFs, and volatile supply-side factors—multiple elements resonating together.

The question now is no longer whether precious metals will continue to rise, but whether they can break through this psychological barrier before year’s end and open a new chapter in 2025.